U.S. stimulus transport funds to flow to states: LaHood

CHICAGO Fri Feb 6, 2009 4:08pm EST

Transportation Secretary Rep. Ray LaHood (R-IL)delivers an opening statement before the Senate Commerce, Science, and Transportation Committee on Capitol Hill in Washington, January 21, 2009. REUTERS/Jonathan Ernst

Transportation Secretary Rep. Ray LaHood (R-IL)delivers an opening statement before the Senate Commerce, Science, and Transportation Committee on Capitol Hill in Washington, January 21, 2009.

Credit: Reuters/Jonathan Ernst

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CHICAGO (Reuters) - Despite pleas from many U.S. mayors that transportation funding included in the economic recovery bill currently being debated in Congress go directly to cities, most of the money will flow through state agencies, Transportation Secretary Ray LaHood said on Thursday.

"Our feeling is the best way to get this money out is through state departments of transportation," LaHood told Midwest-based reporters in a conference call.

The departments, which operate under their respective state governors, have the necessary savvy to move quickly on the so-called shovel-ready projects envisioned by President Barack Obama as a way of creating jobs quickly, he added.

LaHood said smaller communities in particular do not have the ability to "do what the president wants to do -- get the money out the door, have people building roads and bridges and infrastructure spring, summer and fall."

"If (cities) work closely with the state and with the governor they're going to get some roads built in their communities," he added.

Various mayors have expressed concern that money from the more than $800 billion American Recovery and Reinvestment Act, currently working its way through Congress, would stop at the state level or flow so slowly that it would be years before cities experienced any economic boost.

The Department of Transportation has already set up a Transportation Investment Generating Economic Recovery or TIGER team to make sure the money is being spent "rapidly, legally and wisely," LaHood said.

"We're going to hold the governors' feet to the fire on this. The money has to be spent effectively and efficiently in a way that reflects the idea people are working," he said.

With tax revenues falling and costs rising during the year-long recession, state and city governments have asked for funding in the stimulus plan.

Many municipalities have embraced increased infrastructure money as a way to create jobs and get local economies churning again.

LaHood said has asked transportation secretaries from all 50 states to meet in Washington on Wednesday to discuss transparency and accountability in respect to the funding.

He also said that at this point, states will not be asked to put up any matching funds to receive the federal funds.

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(Editing by Gary Crosse)

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